PORTERS DIAMOND

Avinash Shiv Kaoshal Rajeev Vivekanand Chandan

OUTLINE OF THE PRESENTATION

What is porters diamond? It is a concept of six influences (factor conditions, demand conditions, related and supporting industries, industry structure & competitions, role of chance & role of Government) which are relevant in determining the national competitiveness, but it also can be used as a comparative analysis tool in recognizing which country a particular firm is suited to expanding into.

THEORY OF NATIONAL COMPETITIVE ADVANTAGE

The theory attempts to analyze the reasons for a nation's success in a particular industry Porter studied 100 industries in 10 nations for purpose of his analysis

The determinants of competitive advantage of a nation were based on four major attributes

Factor endowments Demand conditions Related and supporting industries Firm strategy, structure and competitiveness

PORTERS DIAMOND
Success occurs where these attributes exist. More/greater the attribute, the higher chance of success

chanc e

Govt .

FACTOR ENDOWMENT/ CONDITION

Basic factors --Natural resources Climate Geographic location Demographics

Labor technical, skilled Land Resources- Raw Materials, Machinery

DEMAND CONDITIONS
Demand:

Total Demand Demand impacts quality and innovation Growth rate Technology Stages of product life cycle

RELATED AND SUPPORTING INDUSTRIES

No of players Technology R&D Communication Networking

FIRM STRATEGY, STRUCTURE AND RIVALRY

Management style- Long term corporate vision is a determinant of success Strategy Presence of domestic rivalry improves a companys competitiveness

ROLE OF CHANCE

Chance: major technological discontinuities, wars, political decision by foreign govt, changes in global financial market , exchange rate,

ROLE OF GOVERNMENT

Stable government Macro Policies- FDI, Social Sector, Capital Market , Monetary polices etc Legal system Others

THANK YOU